Forecast of housing prices in Spain in 2026: what to look for

The market for real estate in Spain is attractive both to international investors and those looking for a vacation or permanent residence. Understanding the future of this sector is crucial for making informed decisions. This analysis provides a detailed forecast of the Spanish real estate market for 2026, based on current market trends, economic indicators, and expert opinions.

Real Estate Market in Spain: A Brief Overview

Will real estate in Spain become more expensive – the market provides a positive answer to this question.

Price Dynamics in Recent Years

After a period of slowdown in 2023, the Spanish real estate market entered an expansion phase in 2024, characterized by increased sales and positive price dynamics. Real estate in Spain is also showing growth in 2025. This is confirmed by data from various financial institutions, as well as the CaixaBank Research indicator:

• In February 2025, the annual price growth for housing was 7.7%, compared to 6.6% in January of the same year.
• The housing price index in Spain reached 172.00 in March 2025, which is 12.29% higher than the previous year.
• The average annual price growth in 2024 was 5.8%.

Thus, the current strength of the market is not a random spike, but a stable cycle, providing a solid foundation for further growth.

However, despite significant price increases (for example, a house that cost €138,000 in 2014 was valued at €178,700 in 2024), Spain is experiencing a housing crisis. This crisis is caused by a structural shortage of supply and high demand, rather than speculative “overheating” as seen in 2008. Understanding this nuance is crucial as it explains why the market is considered stable.

Factors That Will Affect Prices in 2026

The real estate price forecast for Spain in 2026 is based on several key macroeconomic and market factors:

Economic Growth

It is forecasted that Spain’s economy will remain stable at 2.6% in 2025, with a slight slowdown to 2.0% in 2026. This growth is supported by strong domestic demand, a stable labor market, immigration flows, increased consumption, and investment. The contribution of these factors to economic stability allows for the expectation of continued growth.

Interest Rate Reduction

It is expected that the European Central Bank will continue its policy of monetary easing, which will lead to further reductions in interest rates. The key benchmark for Spanish mortgage loans, the 12-month Euribor, has already fallen to approximately 2.08% (July 2025) and is forecasted to drop to around 2.00% by 2026. The reduction in borrowing costs significantly increases purchasing power and stimulates investment.

Sustained Demand Dynamics

Demand for real estate remains high due to increasing gross income, positive migration flows, and continued interest from foreign buyers. The lifestyle in Spain, the climate, and the potential rental yields especially attract foreign buyers. The expected growth of digital nomads also contributes to this demand.

However, the Bank of Spain warns of the ongoing and deepening housing shortage. Barriers to new construction include rising material costs, lengthy bureaucratic processes, and limited availability of suitable land.

This combination of declining interest rates and a persistent shortage of supply creates upward pressure on prices. Lower mortgage rates make housing more affordable, but if the supply does not grow, real estate prices in Spain in 2026 will inevitably increase. This trend is also supported by demographic factors, migration, and the growth in the number of households.

Expert and Analyst Predictions

The opinions of leading financial institutions regarding the prospects of the Spanish real estate market and price forecasts for 2026 generally align with the expectation of continued growth, though at a slower pace compared to the faster growth seen in 2024 and 2025.

Possible Risks in the Real Estate Market in 2026

Despite the overall positive forecast, among the risks in 2026 that could negatively affect price growth, Spanish real estate remains sensitive to the following factors:

1. Political tensions and a potential trade war with the US.
These circumstances may lead to greater caution among potential buyers and investors.

2. Rising housing and rental prices.
Increases make housing and rentals unaffordable for many, especially for the youth. In response to this problem, the government may impose stricter long-term market regulations, which could deter foreign investors and slow down price growth in real estate.

3. Government measures to fight informal short-term rentals.
For example, regulatory uncertainty is created by the directive from Airbnb to remove 66,000 unlicensed listings, the forecast for VAT on tourist rentals, and discussions about possible additional taxes for buyers from outside the EU.

4. Persistent supply restrictions.
Despite an increase in building permits, insufficient new housing is being built, exacerbating the shortage and driving up housing prices.

Tips for Real Estate Buyers in Spain

The overview of the Spanish real estate market confirms the forecast – there are good opportunities to buy today. To make the right decision, it is important to consider a few points and conditions:

• Act quickly.

Due to high demand and limited supply, the best properties are bought very quickly.

• Study the mortgage options.

Mortgage rates are currently decreasing, making loans more affordable. Even non-residents can obtain up to 70% of the property value from Spanish banks, though a slight decrease in this percentage is expected.

• Choose promising regions.

Pay attention to resort regions such as Costa Blanca and Costa del Sol, the Balearic and Canary Islands, and Madrid. These regions are showing steady price growth.

• Keep in mind additional costs.

In addition to the cost of the property itself, you will need to pay around 15% in taxes and fees.

Another recommendation for Ukrainians looking to generate income from Spanish real estate by renting it out – buy licensed tourist apartments. Without such a license, it is illegal to rent a flat or house in Spain for short terms. Authorities in many Spanish regions have tightened regulations and begun cracking down on illegal rentals. Obtaining a license guarantees that the property complies with all regulations and gives the right to list on major platforms like Airbnb or Booking.

Conclusion

The real estate market in Spain is currently in a growth phase, which, according to forecasts, will continue into 2026. It is wise to buy real estate in Spain today, as prices will continue to rise, although not as quickly as before. However, it is important to take into account the potential risks associated with possible tightening of government regulation and the influence of the global economy.